C&WJCCU offers loan-refinancing package
Published:Sunday | April 24, 2011 | 12:00 AM
Communications and Other Workers of Jamaica Co-operative Credit Union Limited (C&WJCCU) has cut interest rates on different loan types to encourage existing borrowers to refinance their debt.
Under the refinancing programme, the rate on secured loans that now attracts 18 per cent interest is being cut to 14 per cent per annum, while the servicing of unsecured debt will now cost 24 per cent on the reducing balance, down from 32 per cent.
Other loans are eligible for consideration for cuts down to 18 per cent, the credit union said.
"We have loans in our portfolio which are at 22 per cent per annum, with a few at 24 per cent per annum. These would benefit from the rate reduction," said general manager Barrington Whyte.
"Borrowers in these categories would have to apply requesting refinancing, and would be required to submit new proof of employment and income and new valuation on the motor vehicles."
They could request either a lower monthly payment, or a shorter repayment term, Whyte said.
The current value of C&WJCCU's loan portfolio is J$2.3 billion.
Loan refinancing is now being encouraged by lenders because of rising defaults on debt since the 2008 financial crisis hit.
Whyte said this week that the new offer on unsecured loans extends to credit card holders.
"Most credit card debts are at interest rates of 48 per cent and above. C&WJCCU is offering to refinance those debts at interest rates of 24 per cent per annum," he said.
"That is a saving of over 100 per cent per annum on the interest rates."
Whyte says he expects the best response to the company's refinancing offer will come from consumers with car loans as well as credit card debt.
Whyte says credit unions - of which there are about 43 in Jamaica - are currently better positioned to offer cheaper rates to consumers.
C&WJCCU has been positioning for more than a year to grow business organically and through acquisition. In the case of the latter, it merged last year with Clarendon Co-operative Credit Union, adding J$1 billion to its asset base and 40,000 members to its roll, and earlier, with Marine and Allied Credit Union.
Its membership base is now at 61,000.
A marketing campaign by the company offers savings on commercial bank loan repayment, credit card debt repayment, consolidated card debt loans, and car loans, with savings calculated at J$72,000 to J$172,000 annually.